If you buy an investment for $800 and then sell it for $1,000 ten months later, what is your annual return on investment (percentage)?

Answer: 25%

Explanation:

The annual return on investment will be calculated as thus:

Invested amount = $800

Returned amount = $1000

Gain = Returned amount - Invested amount = $1000 - $800 = $200

Return on investment = Gain/Invested amount × 100

= 200/800 × 100

= ¼ × 100

= 25%

The return on investment is 25%

Based on the information given your annual return on investment (percentage) is 25%.

First step is to calculate the net return

Net return=Initial value of investment-Final value of investment

Net return=$1,000-$800

Net return=$200

Second step is to calculate the annual return on investment

Annual return on investment=$200/$800×100

Annual return on investment=25%

Inconclusion  your annual return on investment (percentage) is 25%.

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